The US and Russia said today they had ushered in a new era in their relations with the signing of a treaty placing tighter limits on their nuclear arsenals.

After signing the strategic arms reduction treaty (Start) in Prague, Barack Obama and Dmitry Medvedev spoke warmly of their relationship, and looked forward to further arms control negotiations.

It was clear, however, that differences remained, particularly over the issue of US missile defence installations in eastern Europe. Medvedev called the Start agreement "historic" and a "win-win situation" for both countries. But he added the treaty "can be viable only provided there are no quantitative or qualitative increases in ABM (anti-ballistic missile) capabilities".

Standing alongside Medvedev in Prague Castle, Obama insisted the US missile defence plans were "not directed at changing the strategic balance between the US and Russia" but rather at protecting the American people from emerging threats such as Iran.

A senior American official said that before the signing the two leaders "talked about missile defence in more substance" and there were plans for detailed negotiations aimed at removing it as an obstacle to further arms control talks.

The Start treaty limits each side to 1,550 strategic nuclear weapons deployed and ready to fire, and to 700 deployed delivery systems (missiles and heavy bombers).

Obama described the agreement as "just one step on a longer journey" which would set the stage for further cuts. He said he hoped future negotiations would include tactical, short-range weapons, and the thousands of non-deployed weapons which together represent the bulk of both countries' arsenals. Before going further, both leaders will have to get the treaty ratified by their national legislatures. Medvedev said he wanted ratification to be synchronised, implying the Russian Duma would not vote on the Start treaty before the US Senate.

The White House is in the process of negotiating with Republican senators in the hope of mustering the necessary 67 votes to ratify the agreement. US officials said they were still hopeful Start could be ratified before the mid-term congressional elections.

The two leaders frequently exchanged smiles and comments. Obama described Medvedev as a "friend and partner" and Medvedev talked of a "personal chemistry". It was a theme US officials reinforced after the ceremony.

"We're in a very different place in terms of how the two presidents interact," a senior official said. "They are both extremely pragmatic men. I cannot emphasise that enough … it's not always seen as a zero-sum game. [Obama] genuinely feels like they can sit down or call each other and talk things through."

The official said Obama and Medvedev spoke about the situation in Kyrgyzstan, and found common ground. "We see no evidence that this is an anti-American coup or a 'sponsored by Russia' coup," the official said.

Today's bilateral talks overran, postponing the signing ceremony by half an hour. The two presidents and their aides discussed sanctions against Iran aimed at curbing its nuclear ambitions.

Medvedev said it was regrettable that Iran had not responded to a series of "constructive proposals" from the international community.

He said sanctions looked inevitable, but added he had set out Russia's limits on possible UN measures. He argued they should be "smart" and targeted at curbing proliferation, and "not create a catastrophe for the Iranian people".

He did not elaborate, but Russia's deputy foreign minister, Sergei Ryabkov, gave the example of an embargo on the supply of petrol and diesel to Iran, which is dependent on imports because of its lack of refineries.

Such an embargo, which has been suggested by some US officials, would be "a slap, a blow, a huge shock for the whole society and the whole population", Ryabkov said.

US officials said some sort of energy-related sanctions were still on the table at the security council talks, but that the US agreed with Russia the measures should not be aimed at regime change or widespread economic damage.